BP to pay $20B to settle Gulf oil spill lawsuit

GULF OF MEXICO - APRIL 21: In this handout image provided be the U.S. Coast Guard, fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon in the Gulf of Mexico on April 21, 2010 near New Orleans, Louisiana. An estimated leak of 1,000 barrels of oil a day are still leaking into the gulf. Multiple Coast Guard helicopters, planes and cutters responded to rescue the Deepwater Horizon's 126 person crew. (Photo by U.S. Coast Guard via Getty Images)

BP will pay the largest settlement in environmental law history to end a lawsuit over the 2010 Gulf of Mexico oil spill, U.S. Attorney General Loretta Lynch announced Oct. 5.

The energy company will pay the federal government $20 billion to settle claims against it resulting from the spill, considered the worst environmental disaster in U.S. history.

"Taken as a whole, this resolution is a strong and fitting response," Lynch said. "BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region. The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again."

The settlement ends an almost five-year Department of Justice lawsuit against the energy company following an April 2010 explosion on one of its oil rigs in the Gulf.

Lynch said that money from the settlement would be used for further recovery efforts in the Gulf. The bulk of a $5.5-billion-penalty for violations of the Clean Water Act —the largest civil penalty in the history of environmental law— will go towards revitalizing Gulf habitats affected by the spill.

"I am proud that the Department of Justice has helped lead the way from tragedy to opportunity. I am thankful for the many partnerships that were crucial to achieving this result," Lynch said. "And I am confident that the resolution we have announced today will restore, preserve and protect the precious Gulf environment for many generations to come."

Secretary of Commerce Penny Pritzker was also on hand and announced the government's Natural Resources Restoration Plan, an $8.1-billion-proposal to invest in Gulf coast and ocean habitat revitalization.

"Together, these initiatives will build on our efforts of the last five years to move Gulf communities from recovery to restoration to resurgence," said Pritzker.